Gokaldas Exports Limited ($GOKEX)

Ladies and gentlemen, good day, and welcome to the Gokaldas Exports Limited Q4 and Full Year FY '26 Earnings Conference Call hosted by EY. [Operator Instructions] I now hand the conference over to Mr. Kasturi Sharma from EY. Thank you, and over to you, Ms. Sharma.

Thank you so much, Michelle. Good morning to all of you on the call. Before we proceed, let me quickly remind you that the discussions here may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risks that could cause future results, performance or achievements to differ significantly from what is expressed or implied by these forward-looking statements. Please note that we have mailed the results and earnings collaterals and the same are also available on the company's website. In case you have not received these, you can write to us, and we will be happy to send them over to you. To take us through the results and answer your questions today, we have the management of Gokaldas Exports Limited, represented by Mr. Sivaramakrishnan Ganapathi, Vice Chairman and Managing Director; and Mr. Sathyamurthy, Chief Financial Officer. We will begin this call with a brief overview of the quarter and highlights for the year, followed by the Q&A session. With that said, I'll now hand over the call to Mr. Siva. Over to you, sir.

Thank you, [ D ]. Good morning, everyone. Happy to have you at our earnings call for the financial year of 2026. FY '26 marks a year of spectacular disruptions with the year beginning with the imposition of reciprocal tariff, which went through multiple iterations throughout the year. For a significant part of the year, the reciprocal tariff, which is in addition to the already high MFN tariffs imposed by the U.S. on apparel imports remained at a staggering 50% that was way higher than most countries, including China. The later part of the year also saw a war in the Middle East, which imposed an upward pressure on cost of raw materials. The war in Ukraine continued to keep pressure on EU markets. In Q4 FY '26, India business operations for Gokaldas Exports grew by 2% despite the prevalence of steep tariff and the Africa business supported by an extension of AGOA expanded by 17% Y-o-Y. During this period, Indian apparel exports declined by 10%. In FY '26, India operations grew by 10% Y-o-Y despite U.S. tariff-related uncertainties, while Indian apparel exports witnessed a decline of 1.4%. The company offered a net discount of over INR 90 crores for the year to its customers to offset the tariff burden. This is tariff discount passed on to customers net of discounts imposed on the supply chain of ours. Africa business declined by 19%, primarily impacted in the period up to Q3 due to AGOA uncertainties, leading to a reduced order book for that period, resulting in a revenue drop of about INR 180 crores. Despite these headwinds, the company delivered a total income of INR 4,065 crores, a 4% growth over the previous year. Indian apparel exports witnessed a decline during this period. The EBITDA margin was sustained at previous year's level, absorbing a severe financial setback in terms of tariff burden share. The company had booked most of H1 FY '27 orders during the prevalence of penal tariff regime. The company had offered discounts on U.S. shipments to offset the penal tariff. After normalization of the penal tariff, there has been a reset of pricing to its customers, leading to margin improvement. Africa business witnessed a healthy growth and will continue its growth momentum in FY '27 post the renewal of AGOA. The company continued the committed capital expenditure in creating newer capacities and upgrading its existing machinery and equipment to support future growth. During the year, the company spent about INR 170 crores towards new capacity creation, which will pay out in the years ahead. Net debt has increased by INR 395 crores, primarily driven by CapEx investments for incremental capacity expansion, additional investments in B2PL and increased working capital on account of volume increase. The withdrawal of penal 25% tariff in February and the subsequent U.S. Supreme Court ruling against the tariffs led to a 10% tariff being imposed under -- until July 24, 2026. AGOA got restored till December 2026. With the competitiveness of these main production centers of the company restored, the revenue and margin outlook for FY '27 has improved. Tariff has showed the resilience of the company as its entire operations were severely impacted on account of surge in tariff for both India and Africa. The company used this opportunity to strengthen its leadership team, build durable processes and expand its customer outreach to secure the company from future shocks. It looks like the worst is behind us. Even if tariff is reimposed under Section 301, there is a strong likelihood that it will be somewhat similar to most competing nations from Asia. Africa is not under Section 301 investigation, giving further comfort. The company signed up two new premium customers in FY '26 for its India operations, one American and one European that will begin yielding revenue from FY '27. There is a good momentum from existing customers as well. Growth of revenue from European customers continues to be strong. Similarly, for its Africa operations as well, the company has onboarded two new customers, American and European that will begin operations in FY '27. On demand front, U.S. and U.K. retail sales witnessed a strong growth of 8% and 6%, respectively, for CY '25. U.S. sales continue to remain strong in early 2026 as well, while U.K. is showing signs of [ waning ]. Despite such strong sales, retailers in U.S. have started paring down their imports from -- from second half of calendar 2025, owing to market and tariff-related uncertainties. This means that their inventory may be paring down and could provide us some cushion for growth in the future. The U.S.-Iran war has impacted textile value chain with increased cost of raw materials like fuel, packaging, polyester and trims. Cotton prices have also risen due to a combination of higher yarn exports to China and substitution from MMS to natural fibers, weather-related disruptions, et cetera. Shipping costs have increased as well. Inflation across economies on account of higher fuel prices could impact consumer spending. Most U.S. retailers and many EU retailers continue to diversify away from China-based suppliers. This helps growth of other regions. India remains a strong long-term prospect for sourcing. The trend of consolidating in favor of stronger suppliers also continues. FTAs with European region could help in strengthening the prospects of the industry. The company is expected to continue its growth trajectory in FY '27, delivering strong performance across its business. The company has initiated merger of BTPL subject to NCLT approval. This is expected to conclude in the third quarter of FY '27. There has been steady progress of operational improvement there. It is expected to turn in operating profits in the second half of the financial year. The capacity utilization at BTPL is approaching nearly 50 lakh meters per month, and the mill has currently a capacity of 70 lakh meters a month and can be raised to 100 lakh meters per month with an additional capital expenditure of about INR 50 crores to INR 60 crores. I thank you for listening, and I would be happy to address any questions that you may have.

[Operator Instructions] The first question comes from the line of [indiscernible] from ICICIdirect.

Sir, my first question is on the profitability. We have seen in this quarter stand-alone business EBITDA margins -- operating EBITDA margins improving to 12%. And if we just minus stand-alone, which is largely subsidiaries, there the EBITDA margin stood at around 5.9%. So we have seen substantial improvement in the stand-alone margins, which is largely related to India business margins, while subsidiaries margins are yet -- so considering your outlook in the initial comment and the way we look at the cotton prices and the other prices have also gone up because of the other commodity prices have also gone up because of the India -- sorry, Iran war. So in that context, should we expect this 12% kind of range for India business to sustain? And what is your outlook on the Africa business margins because that is currently lower. But considering the fact that the business will improve in that region, should we expect margins over there also to improve in the quarters ahead? So this is my first question.

Okay. Thank you, [ Raskar ]. You're right. The Africa business has had -- but we are anticipating that in the business flow is strong, and we should have a continuous improvement of EBITDA margin in Africa. I anticipate that in the second half of FY '27, Africa business would have an EBITDA margin of somewhere between 8% and 10%, and we are working towards that. The order flow is also moving in the direction where our operating leverage will also kick in, allowing us to improve our EBITDA margin substantially. The other Indian subsidiaries, which is non-Gokaldas Exports, which are Matrix and others, have also had some minor setbacks in the fourth quarter, particularly because the tariff continued to be high in Q3 and Q4 at about 50%. And some of the customers there, instead of asking for discounts, just pivoted to other regions for business. This also is reversing back in FY '27 because the tariffs have normalized. So there is an upsurge that we will see in India, thanks to tariff blowing away, the 50% [indiscernible] tariff blowing away somewhere in the middle of February 2026. And going forward, India business margins will improve as well as Africa business margins will also improve.

Sir my second question is on the working capital. So this year, our working capital days have gone up and we can understand because of the inventory days have gone up. But now since the tariff issues are and if things are good going ahead, so should we expect working capital to improve from here? And on the other hand, the working capital loan also will get reduced maybe in FY '27. So your outlook on this?

So I'll give you a high level. We are, of course, working towards reducing working capital in the India apparel business. The working capital deployed in the business has slightly increased in Africa because of the customer mix that we had in Q4. There was also a year-end factor where certain receivables took time to mature and hence, working capital balloon towards the end of the year. We also had some fabric-related working capital increases in our business. But overall, I feel that in FY '27, the working capital should taper down. There will be an increase in working capital as and when BTPL merges into Gokaldas because that entity's working capital will also come in. But obviously, it will also come in with its own revenue stream, et cetera. But I feel that the year ahead, Gokaldas' working capital should moderate down or temper down a bit. Sathya, you want to add more color to this?

Yes. So there was also -- additionally to the point whatever Mr. Siva mentioned, we have also -- we had to advance the material import to take care of the Q1 execution. So because of that, the Chinese holidays, we have -- and with the import content involved, we have to additionally invest close to about INR 50 crores to INR 60 crores that has happened in Gokaldas. These things will get -- we are working towards how do I improve it. So one is the inventory buildup, which has incrementally happened to take care of the volume in local [indiscernible] apart from the incremental volume, which is happening in Atraco. So these are the two major additions which has happened on the inventory. Other one is on the customer mix, what he has talked about, that is on the receivables. So that we are working towards to work with the customer to really work on the early payment program and other initiatives. So at least our intention is that there is an overall increase of almost INR 200 crores. Our intention is to really work to bring down the working capital, whatever incremental volume which has happened by at least about INR [ 75 ] crores to INR 100 crores in this financial year in Gokaldas operations, that is Gokaldas and Atraco operation. Obviously, the incremental working capital will happen when it is BTPL-[ surged ] with Gokaldas at least Gokaldas [indiscernible] as is basis, our intention is to really bring down our working capital at least to the extent of INR 75 crores during this year from where we are at this point of time.

And one last, if I can. In our outlook for FY '27, we considered the incremental benefit we will be getting India -- so are we considering that in terms of any incremental revenues from the customers what we already have in the U.K. is any new customer we will be adding in the quarters.

No, we are not considering. We do not consider until and unless the FDA actually fructifies. So an impending FTA with U.K. sometime this year and probably an EU FDA sometime next year could help further fuel the momentum on the business. However, we have not factored in any of these. The U.K. FDA itself has been delayed. It was supposed to come by April, May, but now it's further delayed, and we are awaiting the date when it will get implemented. So we don't factor in until some of these things actually materialize.

So excluding that, should we expect around 10% to 12% kind of revenue growth considering that things have improved -- will be improving in Africa and there is a stable environment in the stand-alone business?

I would probably reckon it will be much more than that.

[Operator Instructions] The next question is from the line of [ Mohan Singh ] from Master Portfolio Services Limited. There's no response we will move on to the next question from the line of Gunjan Kabra from NIVESHAAY.

[indiscernible] other demand can understand that how is the demand shaping up considering in the U.S. 1.5 or 2 years. market now the raw material logistics cost, everything has also increased. So how is right now the demand traction in the U.S. or whether we are becoming much more competitive with respect to currency as well? And is it like the most exciting time right now for us?

Thank you, hedging policy where we hedge the receivables for the quarters ahead. And for 2 quarters ahead, we hedge almost 80% of the revenues and the subsequent 2 quarters, that is third and the fourth quarter, we hedged to the extent of 50%. So our hedging principle means that almost for 80% of the revenue for -- up to Q2, we have hedged at prices ranging from INR 87 to $1 to about INR 91 to $1. So we are not really seeing the advantage of a weaker rupee because of the hedges that we have. You will appreciate that the rupee weakened so fast in the last few months that hedges have proven to be counterproductive for us, but that's the policy that we have. We don't speculate on the rupee. It's movement in either direction. So that means that the rupee depreciation advantage is not baked into our numbers and will probably only flow in H2. Having said this, from a -- your question was mainly from a demand perspective. And once the U.S. tariff or the penal tariff went down from 50% to 25% initially and then immediately after the Supreme Court order went down to 10%, we got a level playing field with the rest of the world. You will see that our revenues never dipped even during 50% tariff regime. We maintained our revenue, even though we gave discounts, et cetera, we maintained our revenue. In fact, we slightly grew our revenue even after giving discounts. That shows that how strong Gokaldas' relationship with its customers are that with a substantial American customer base, we still managed to grow the business. So our feeling is that now that the tariff has leveled off, there is a global equal tariff across the board. And the prognosis is that even if Section 301 tariff is imposed going forward from end of July, it should bring India nearly at about nearly at par with the rest of Asia in that 20%-odd range. And again, this is speculative. We have to see where we land at that point in time. We will still have a level playing field, which really means that our competitive advantage is sustained. Weakening -- weaker rupee will obviously add to the competitive advantage, which we have not yet seen, but we will see going forward in the future. So overall, I don't see any problem from a demand standpoint. And U.S. retail sales is also going strong. We are watching how U.S. retail sales will pan out in the second half of calendar '26 and early '27. At the moment, we are booking orders for spring '27. And while the order flow is good, there may be some apprehensions with respect to inflation in the U.S., higher gas prices, et cetera, et cetera. So we'll have to see how it actually pans out. We may -- while the customers are being conservative in placing orders and will come closer to date with additional orders, we seem to find that our order book is relatively very robust and strong. So we're confident that India's competitive advantage is restored. We're confident that our customer relations and our business model will be able to attract a fairly strong business flow in the quarters ahead.

And what's the inquiries in terms of new customers coming to Gokaldas reaching out to them? How is that order inquiry order flow right now?

So we are being selective. We just don't want to go add several new customers. as the overhead of managing multiple new customers actually brings down the profit in the initial period. So we are selective. We are adding -- we have added 2 customers, which will materialize in FY '27. Both are premium customers. And we may choose to add one or two more with whom discussions. And again, these are all top class customers, customers who are doing exceedingly well in the market and whose brand names are also pretty strong and performance are strong. So we are very selective in adding customers. We will also be selective in growing with them. We want to make sure that our execution is perfect before we start ramping up -- so the contribution from these new customers in the first year will be only -- will be of the order of single-digit percentage of total revenue, maybe more like 5%. The idea is that they will scale up in the years ahead pretty smartly. We have enough order flow from our existing customers to absorb additional capacity. So there's no dearth of business that we feel confident that we can continue to sustain our growth momentum.

A small portion, but is there any incremental tactical demand that can come in the U.S. because of the adoption of GST?

Can you repeat that question?

This might be a little smaller proportion, but since the inventory there is low.

I am not seeing any apparel. All this will have to pan out. We are seeing growth because of inventory issues, I've not seen any short tactical advantage. We'll have to wait and see.

And are we planning any CapEx...

We will do some CapEx selectively. We will also watch and see how the markets react to how the tariff regime unfolds in July. But to sustain our at least 15% kind of growth, we will definitely work on the CapEx that is required to manage that and to deliver that growth.

Got it. And sir, what would be the major reason for India's export yarn exports to China in the cotton segment increasing a lot? And how sustainable does this look like?

I mean, at the end of the day, China is buying a lot of Indian yarn because they tend to operate with a herd mentality. Their own market is also very large. And if they want to export, then they may have to also tap into Indian market. So these are all trade movements. It could sustain. It could slow down going forward. I think cotton prices depending on cotton yields may probably ease off starting October, November this year. But at the end of the day, from a pure apparel standpoint, cotton and raw material prices eventually will become a pass-through for us. So if the cotton prices go up and hence, fabric prices go up, we will tend to factor that in the pricing of the goods that we produce.

[indiscernible] will get expired in December '26. So probability of renewal and how will that take time, how will that be?

So if you recall, in the Congress, the AGOA -- the House of Representatives approved a 3-year AGOA renewal. Usually, AGOA gets renewed for every 10 years. U.S. wants Africa on account of its mineral presence, et cetera. But the current U.S. administration also thinks that they want to enter into country-by-country deals rather than a pan-Africa deal. When the Congress approved -- the House of Representatives approved a 3-year AGOA deal, the administration brought it down to 1 year. The belief is that AGOA may get further extended towards the end of this year by another 1 year or 2 years, which will allow U.S. to enter into agreements with individual countries. There's an FTA on the annual with Kenya, which is where bulk of our operations are. I'm not confident that it will happen by end of this year. I feel more -- I get a feeling that AGOA may get extended and that may continue to provide relief. The other topic is that come Section 301 tariffs from July where tariffs may go up to 20-odd percent for rest of the world. Kenya will continue to remain at 10% because there is no Section 301 investigation for African countries. So the tariff will continue to remain at 10%, which it was even earlier. So the tariff advantage for Kenya will continue to remain, which will probably give that region a sustainable advantage going forward, AGOA or no AGOA. If AGOA comes through or AGOA extension comes through, then the story for that region becomes even more compelling. When I look at our order book, it seems to be pretty strong. At this moment, we are working on third quarter and fourth quarter orders there. And the initial impression that I get is that there is a fairly strong amount of traction for continued business there.

We'll take the next question from the line of Vishal Mehta from IIFL Capital.

Congratulations on a resilient set. My first question, just continuing on the AGOA expiry topic. If the AGOA renewal announcement is delayed like in the case it was done last year, last time and just hypothetically assuming that 301 tariff stays at 10% globally, what prevents a situation same like last time to happen as in the customers again start delaying their orders or probably expecting that there's probably a renewal of AGOA in the annual, et cetera. So just wanted that.

So then AGOA... We -- some of the customers came and asked us for sharing of the burden, et cetera, and we slightly refused because we did not believe that our Africa business was resilient at that time for us to share any business discounts or anything to go and give an artificial support to us. And at that point in time, there was -- in anticipation of all of this, there was a business drop, which we let happen and try to curtail our margins, our costs rather than simply go book business without AGOA. This time around, I feel that Section 301 tariff is more real, and it's quite likely that post July '24, there is going to be a reset of tariff back to 20-odd percent for rest of the world, barring Africa, which may remain at 10% because that's not covered under that. The administration is quite intent in achieving that and all signs are pointing in that direction. AGOA renewal is still to be decided. And my sense is that there may be -- it may get -- it may come towards the end of the year. It may get extended by a year and getting extended by increments of 1 year going forward until individual FTAs are worked on. But assuming that none of this materializes, what is our confidence? We have expanded our customer base so that we have now many more customers in Africa. We have had multiple conversations with customers -- with whom we are working in Africa to ensure that come AGOA or AGOA, we should see business flows. We are now open a little bit if we have to address AGOA-related tariff, we have the size scale and the volumes to address some AGOA-related issues if we need to. So I feel confident that the revenue fall this time may not be happening given the diversity of customer base, given the discussions that we have had and some of the external indicators that I'm seeing, which may not be as dire as the scenario we just discussed.

Sure. My second question was just wanted to check on the time lines for capacity commissioning on India and Africa. Africa the expansion is the new capacity commissioned already? And what kind of revenue capacity are we currently at there? And what will it be after the expansion? And similarly in India over 1Q and 2Q, what sort of revenue capacity additions are we expecting? So just time lines on these?

So capacity expansion in Africa has already happened last year. And we anticipate that in FY '27, we should at least target approximately $115 million, $120 million in revenue regardless of what the status is. I think $115 million is the worst case. We could even do $120 million in top line in FY '27. This is in comparison in FY '26, we did about $80-odd million or in that region. So there is a huge growth, which we will see in Africa, and that growth will also bring with it some margin improvement. The operations and the factories are completely aligned. If there is an additional tailwind, we do have the prospects of opening up second shift operations. So we don't want to add a lot of further physical CapEx we can probably see some incremental growth by operating two shifts. We've already started 2 shift operations in one of the factories in Africa. And we have about 20%, 25% of that factory's capacity running on 2 shifts, and it's working successfully. So there is -- and the workers are available. Unlike India, it's much more easier to recruit second shift operations in Africa given the need for jobs. So there is a further opportunity for us to increase capacity without putting too much of capital here, which is an advantage. As far as India is concerned from a capacity growth standpoint, we do have capacity in our existing facilities. For example, the facility in Karnataka in Kolar Gold Fields, where we still have half a factory yet to ramp up which is on the ramp as we speak. So it will ramp up in Q1 and Q2, and we'll take it to full capacity utilization. The second shed in Madhya Pradesh is getting commissioned, and we have started expanding the lines as we speak, and it will reach full capacity utilization by third quarter of FY '27. So from September, October onwards, that 1,000 machines will operate at full capacity, which is -- which at the end of March, those 1,000 machines were nonoperational. Now 2, 3 lines have started getting operational and it will continue to expand. In addition, we have an option to commission 2 new factories, which the call for which we will take in the next quarter or so, depending on how the tariff -- if there is any new tariff or geopolitical situation that we need to deal with. But most likely, given how the customer tractions are and business tractions are, we may have to press that button and go ahead and add those incremental capacities for sustaining growth towards latter half of FY '27, but more particularly in FY '28.

So the Karnataka and Bhopal additionally adds around INR 400 crores, INR 500 crores to the revenue capacity?

For FY '27, you mean?

At full capacity.

Capacity the additional 1,000 machines in Bhopal will add about...

INR 175 crores. Bhopal will add INR 175 crores and another INR 125 crores in steady state.

Yes. So that's...

Capacities that we are talking about, that can always bring in incremental revenue. That also at steady state will bring in another INR 300-odd crores of revenue. But that will take a little longer because those are just in planning at the moment.

Okay. Actually, your voice was breaking when you were answering just -- so INR 400 crores.

Let me just the Karnataka and Bhopal units will add at steady state INR 300 crores of top line. And then we have two other units which we are -- which is in the planning stage. Those 2 units at its steady state, which will not be in FY '27, but which will probably be in FY '28 or even later, can add another INR 300 crores. This is apart from whatever debottlenecking capacities that we will continue to do in all our existing facilities.

Sure -- just last question on margins. Given the input cost inflation that we've already seen, are we kind of when we are now probably finalizing our orders for probably, say, second half, are we probably seeing customers accepting that pass-through of increased input inflation as in -- are we increasing our pricing?

The second half orders are yet to be closed. Obviously, we are eating up some of those margins in the first half. Orders were booked long back. And those first half orders were booked even when the tariff was 50% even it was booked pre-February. And obviously, there were a lot of price pressures and order pressures, et cetera, et cetera. But in the second half, we -- our endeavor is to try to push back as much of these price increases back to the customer. There is obviously a resistance back from the customers as well because they are also anticipating inflation-led demand challenges from the U.S. Everything depends on the Iran war and the continuance of it. If the hiatus that has been obtained there continues and if the oil prices cool off, I think both demand and price pressures will ease off, but that time will tell. At the moment, our endeavor is to push back on that price increase. We may succeed in partially passing it on, not passing everything on in full, primarily because I'm also seeing Southeast Asian players and Chinese players quite happy to absorb some of these cost increases as a strategic move because many of them are sitting on undercapacity utilization. So there is going to be all those global geopolitical capacity demand fight that will happen. But nevertheless, in the long run, I guess all of this will get pushed back in the short run, particularly in second half, we may recover a portion of it. I also feel that some of the pricing pressure may also ease off. We wait and watch.

Okay. Just a follow-up on this one. You said that you negotiated first half orders when the tariffs were still there. So does that mean that we'll still see some tariff rebate-related pressures in 1H or no?

Our tariff rebate was clear that as long as the penal tariff was there, there was the rebate was an add-on. So the -- as long as the penal tariff was there, there was this rebate. When the penal tariff went, the rebate also went out. So the impact that we took in Q3 and partly in Q4 would not be there going forward. Having said that, apart from the rebate, there were sharper prices that we gave in Q1 and Q2 because we wanted to maintain the business in country as opposed to allow it to drift out of India, keeping longer-term business interest in mind. So to that extent, the small sharper prices that we gave for Q1, excluding the rebate, I'm saying, is something that we may have to absorb in Q1 and Q2. those sharper prices are also being taken off in Q3 and Q4. So when we are pricing Q3 orders, we are not even giving the sharp pricing that we gave in Q3 and Q4. Certainly, there is no rebate on top of it at all for the year. Does that clarify?

Yes.

Rebates were to the order of up to 15%, part of it which we clawed back by asking rebates from our supply chain. The sharper pricing was to the extent of 3%, which continues in H1. But in H2, that also goes away. The rebate of 15 -- I mean the tariff burden share of 15% went away from mid-February onwards. Does that give you a better color now?

Yes.

We'll take the next question from the line of [ Amit Chheda ] from Banyan Capital.

I just had two questions. You spoke about the new capacities that you are planning. Although it's too soon, but what would be an approximate CapEx for these two factor.

The CapEx should be for both of them put together should be of the order of INR 80 crores to INR 100 crores. Probably it will get spread over 2...

2 years if I'm not wrong, you said that FY '28, we will start seeing revenues.

That is correct. So as we keep putting the lines, we will have to -- we'll incur additional CapEx in FY '28. It will come towards the end of second half of FY '27 if we decide to bring it on board and some portion of it may rectify in the second -- in the early part of FY '28.

Okay. Understood. And if you can just share the revenue of BPL for Q4.

Q4 of FY '22?

Yes.

Q4 FY '26, our revenue was above the revenue of that entity of that company INR 190 crores.

Sorry INR 190 crores. Yes. Okay. And what was the...

At an EBITDA level, I think the company lost about 4%, 5%.

What is the revenue that we are expecting in FY '27 with the ramp-up in DR?

So I mean the revenue for the year should be in excess of INR 10 crores.

Sorry, I didn't get you. Your voice was breaking. The revenue for FY '27 for that company should be in excess of INR 1,000 crores based on the momentum that it is going...

[Operator Instructions] We'll take the next question from the line of [indiscernible] from [indiscernible]

Those ramp up to our internal targets or you could give us some color on.

So short answer, no, they are not up to our targets. And the reason for that is we went through an extraordinary level of disruption in terms of tariffs. All the businesses locations that we have, whether it is India or Africa, both suffered extreme tariff situation. AGOA went away in Africa taking away MFN tariff anywhere between 20% to 32%. If you look at the underlying apparel tariff, that ranges from 14% to 32% and most of Africa was doing synthetics, where the duty differential is the highest, which was between 25% and 32%. So to that extent, the tariff bumped up, which then again went back when AGOA was stated. And India went -- tariff went up to 50% at 30% tariff delta vis-a-vis rest of Asia. So we did have huge disruption, which impacted business. Different customers reacted differently, some ask for discounts, some took the business away to other regions or some pulled down the business, some pivoted their U.S. sourcing from India to European sourcing from India if they had operations elsewhere. But all of this meant that the business volumes partly shrunk or the margins took a hit last year. Having said that, overall, we actually delivered a higher revenue despite all these challenges because we made sure that all our capacities got fully utilized, and we -- our teams went and sold the capacity in its entirety and more. So -- so now going forward in the year FY '27, the expectation is that all these acquired entities will perform as per plan in that year.

Okay. And sir, also on the margin side, so we've seen a lot of volatility given tariffs, given government incentives and as well as integration of these acquisitions. So could you guide us on the margin side, what is the view for the current year?

When you say current you mean FY '27?

Yes, FY '27.

So the margin should improve, of course, from FY '26 was -- and hopefully, that's is what kind of tariff disruptions we will see going forward. So everything gets subject to that. So come July, there could be a Section 301 tariff, which may get imposed. But otherwise, I feel that there will be a couple of percentage point improvement in margins Y-o-Y on account of the disruptions being behind us. Our endeavor will be to try to do better than that. What we don't know is what kind of disruptions will be unleashed in the year ahead. So everything is subject to that.

We'll take the next question from the line of Chirag Jain from [indiscernible]

Congrats on a very resilient performance during a very challenging year. So just one question on the Q4 numbers, specifically in the stand-alone. I'm not sure if you addressed it earlier, I missed the starting point. The margins expanded Q-o-Q and Y-o-Y by around 200 to 400 basis points, right? So just wanted to understand what led to that? Was it just that tariff reversal which happened? Or there was one ruling which said that the U.S. Supreme Court ruling that the U.S. has to refund the tariff. So was any of those bookings also incorporated into this? Just want to understand where did that gross margin benefit came from in the specifically Q4 quarter in the stand-alone operations?

Okay. So largely, it is because of the sheer volume, the revenue growth that we had. So the operating leverage helped. There has been no tariff reversals being factored in anywhere. The tariff reversal portal has opened in the U.S. Many brands have started applying for tariff refunds. But it's unknown whether some of those tariff refunds will be passed back to the supply chain. There have been instances where customers of those brands have also sought tariff refunds to the customers. Nike has seen a class action that they -- all the tariff increases were passed on to the customers and hence, the tariff reversals, which accrue to the company should be -- which is, in this case, the retailer should be passed back to the customer. So this opens the Pandora's box of how it will all be dealt with. There is enough confusion out there. So we don't know whether the supply chain will receive any benefit out of tariff reversals. That's yet to be seen out there in the future, and we don't -- we're not even counting on it. But going forward, the tariff burden that we shared with the customers are no longer going to be there. So that margin inflation will certainly happen. As far as Q4 stand-alone performance is concerned, the half of the quarter was impacted with the PL tariff 50%. It got withdrawn mid-February. So post that shipments, we have not factored in the tariff discounts that we offered until middle of February. So that also helped us in some margin improvement.

So basically, as you rightly mentioned, only half of the quarter was impacted by tariffs. So if I assume the number which you mentioned in the note that around INR 18 crores tariff impact was taken this quarter. Technically, if I add that back, that should be the normalized margin running forward given the scale of revenue.

For the stand-alone yes.

For the stand-alone, yes. So when you mentioned 200 basis points of margin expansion for the full year, it should be much higher, right, given the Q4's performance, especially in the India stand-alone business. And then you are mentioning that Africa will grow by almost 50%. So obviously, that will also see a big margin bump up. But I understand input cost is one -- sorry, please.

Yes, that's my point. The input cost point, the fact that our H1 at a little sharper pricing because we were booking H1 business when the tariff was iinsanely high on India, and we wanted to keep the revenue rather than let it go out because at some point when the tariff reverses, we didn't want to see business vaporize from the region. So there's been gave at an underlying level, which will get reversed into Q3 and Q4. So there is a little bit of that. And I'm factoring in some levels of unknowns, which who knows what will be unleashed during this year. We all know that we are living in an extraordinarily volatile time. So I'm factoring in all of that when I say 2%.

The next question is from the line of [ Akash Deep Singh ] from Master Capital Services Limited.

Stands today in terms of million pieces both in Indian and Africa? And what capacity does management desires to reach in India and Africa in coming years? And sir, what EBITDA margins we could expect for acquisition BTL in FY '27?

I'll let Sathya answer this question.

The capacity numbers in terms of number of pieces, it will be misleading, but however, I'll give the number. As far as India operations is concerned, it is $52 million and Africa operation is $40 million. This you have to look at it in context with what is the realization we get in each of the we say $40 million pieces into that was at the rate of $2.5 was the average realization. When the realization goes up, the number of pieces what you may achieve will slightly change because we handle a multiproduct. That's why we prefer to really give the numbers on the overall value what we can drive from each of the capacity, okay? And in terms of the new addition of the capacity during the year and whatever which is likely in the pipeline, in India, we added another 9 million pieces we have added the capacity and Africa is about -- sorry, in India, it is about 7.5 million and Africa is about -- so in total, with the new capacities coming on board, our capacity in terms of the capacity in terms of pes will remain at 104 million, but it comes with a caveat for India when you take -- you should take at the rate of INR 500 realization on average. And in case of Africa, you take the $20 average.

And sir, for the second question, what margin we should expect for BTPL in FY '27?

[indiscernible] EBITDA H1 EBITDA in H2. So we should really expect about EBITDA level around 6% to 7% in H2.

The next question is from the line of [ Sagar Makwana ] -- as there is no response, we will move on to the next question from the line of Niraj Mansingka from White Pine Investment Management.

I had two questions. One, can you clarify that the stand-alone EBITDA margin for the Q4 was between 14% and 16% because the numbers look high.

During the quarter, is Q4 number when we look at it, it's at 17% if you add on -- add back the tariff impact. But remember, normally, quarter 4 is a year normally whatever the provision we make for all the statutory provisions, everything will be taken and it will be during the audit. It will be taken and consolidated and there will be some reversals also happen. This happens every year. So that's why you really see that in Q4 relatively, the performance, I mean, EBITDA numbers look relatively higher. At least you need to really factor in 1% to 1.5% on account of that. But for that rest of things flow through on account of operations, what Mr. Siva has explained because of the volume and the scale benefit, whatever you see.

If I remove the impact of reversals, it can go to 15.5% -- and this happened because of operating leverage in the Q4?

Correct.

But next year, you're talking of higher volumes. So should we expect the EBITDA from the year to go up by another 200 bps on an average because of the operating leverage. Is it right, sir?

In terms of -- that's Mr. Shiva in the earlier question, he has addressed the responses. There is a possibility -- I mean, there are other challenges which you may see as far as Q1, even H1 is concerned because already the sharper pricing has been given. That's the point which he has highlighted apart from if there is any unknown contingencies, that's why he has indicated that you cannot extrapol the same way as you see. Maybe for Q4 or Q4, probably there could be -- you can really compare it. But on a full year basis, whatever Mr. Siva has given the guidance, that will hold good.

The question to Siva, if you look at in the same like-to-like condition what margin would you expect on a stable state in FY '28 if you remove all the one-offs here because that would explain us where your margins are heading on long term.

You're talking of FY '28, right?

Yes, yes.

My -- this is an estimation because this has to be caveated with any geopolitical events or any disruptions. We don't know what all can. But let's assume that FY '24 somewhat of a steady state year, let's say, right, except for the fact that some new capacities which are always coming on board, which may have some negative EBITDA contribution because every new capacity in the initial 2 years tend to depress the earnings from that capacity. So if you look at it from that standpoint, and there's no externalities or external disruptions of a significant nature, then I think the India EBITDA margin should be of the order of 13%, 13.5%, whereas the Africa EBITDA margin should be about 10%, 10.5% for that year. And the ratio between India and Africa from a revenue standpoint should be about 75-25 or anywhere between 75-25 to 80-20.

And you're not talking about the Bombay including in that...

In FY '28 also should be contributing an EBITDA margin of anywhere -- I would say in the first -- in FY '28, perhaps more closer to 12%. But if I take an FY '29 view, it should also be of the order of 14%.

Got it. Got it. Last question on the Bangladesh, can you tell us how the customers are looking at Bangladesh versus India and some anecdotal evidence will be useful.

Sure, sure. So Bangladesh, during its peak disruption when there was a regime change from [ Avi ] to an interim government and all the problems, there were a lot of concerns and people wanted to diversify out. European customers still consider that they have overinvested in Bangladesh. And thanks to good solid commercial reason because Bangladesh was duty-free to Europe. And once FDA comes, they are very, very clear that they want to diversify out of Bangladesh to an extent because now they'll get a level playing field as far as tariff is concerned between India and Europe. As far as American customers are concerned, the general impression is that Bangladesh is now somewhat stable with the new government in place from BNP. The impression is that Bangladesh continues to be a low-cost region. So the importance of Bangladesh will continue in the global apparel manufacturing space. The only concern is that with high oil prices, et cetera, many retailers also when they look at Bangladesh, feel that their ability to withstand oil shocks, et cetera, because they are very import-dependent countries and all of these smaller countries will have low [ BOT ] balance of payment surpluses or dollar surpluses that there is a risk that some of these countries may find local inflation [ gallapping ] as energy costs go up and all the imported goods costs go up. So there is a fear that we are better off diversifying. So net-net, if we synthesize all of this, the impression is that, yes, cost-effective location. It has got now a stable government. But let's not put all eggs in Bangladesh basket, let's diversify. And when they look at diversifying, India stands out as a very for them to diversify.

We take the next question from the line of [indiscernible] from Axia India.

I just have a bookkeeping question. If you could just tell the volume for AGOA.

It is there in the presentation, but sorry, you are talking about AGOA standalone?

Yes.

For India operations, I'll give the numbers. For India operations, it's 10.9 million for the quarter at the rate of INR 742.

For the full year, just for the stand-alone AGOA entity of Matrix?

For standalone, it is INR 3.62 million and at the rate of INR 765.

The next question is from the line of Heet Vora from Guardian Capital Partners.

Congratulations on a very strong sequential recovery. So just picking up from the previous comments that you made on Bangladesh. So one thing that we've been reading is that there are a lot of power cuts happening in Bangladesh. Most of the time, Bangladesh textile companies, they run on generators, which run on diesel. But in current situation, even that is difficult because diesel availability is an issue. So are you seeing any orders maybe now or any additional inquiries moving from Bangladesh to maybe India given the current situation?

So, at the end of the day, from a customer standpoint, they will look at what is net cost and sense any disruption. So most Bangladesh operators somehow managed to ensure deliveries do happen regardless of all the energy disruptions. That's why I indicated that customers are wary of putting more business there simply because of volatility disruptions on account of energy and various other reasons. But from a political stability standpoint, Bangladesh seems to have become better -- it all depends on what is the cost economics and cost economics, at least for now from a European standpoint, Bangladesh scores very well. From an American standpoint as well, their costs are lower because the labor costs are lower. But as I said, again, nobody is going to expand aggressively there. They will continue to expand modestly there.

And just one more addition on this is that I think that LDP status is also about to end. And I mean, there's no clarity whether it gets extended. So in an event that does not happen, do you see any advantage for India? I mean in U.S., I think everyone goes at a similar rate, but maybe ex of U.S., do you foresee a sizable windfall for maybe India from that standpoint? Or do you think they'll maybe agree on an FTA before that?

So their LDP status move was extended from 2026 to 2029. So it's highly likely that post 2029, the will get removed. Would Bangladesh enter into an FTA with Europe, there is a likelihood. Is Europe going to perceive Bangladesh is a big enough market to enter into an FTA with Bangladesh, that is something which is a big question because FTAs are always reciprocal. And if Europe Bangladesh market being large enough, then only an FTA may happen. So it's probably unlikely or probably challenging. We got to see. Would that result in a windfall opportunity? Bangladesh labor cost continues to remain low. However, it is also increasing as we speak. So I feel that it is definitely an opportunity for India. And if India secures an FDA, it is a massive windfall for India.

Understood. And just the last question was actually on Africa. So we are quite confident on our operations improving there. Do you see any sort of impact on your operations largely on account of the current riots that we're hearing about largely on account of this entire petroleum sort of price hike happening there? And is there any issue on power availability in the African operations? I mean just wanted to understand that.

Answer is no disruptions whatsoever. We are in [ Mombasa ] there are absolutely no problems. We are right in the port. We've had no issues either from power, labor disruption, civil disruptions, nothing.

The next question is from the line of [ Abhishek Shankar ] from ICICI.

So I just wanted to know that you mentioned in the PPT that the tax expense -- the rise in tax expense is mainly belong to the stand-alone entity. So what is the reason for the tax expense in the stand-alone entity?

Consolidated -- when you look at the consolidated profit, it is basically the tax expenses incurred on various entities and you consolidate. Generally, because of the underperformance what we mentioned from overseas entities because Atraco, whatever the reasons [indiscernible], we couldn't really do -- we could achieve the profitability what we originally anticipated. That doesn't carry any tax credit, right, for the losses. So -- and similarly for some of the new investments whatever we made in fabric business though at the EBITDA level, they have been breaking even in the quarter, but there has been some carryforward interest and depreciation expenses, they could not recover it in the current year. So to that extent, the losses whatever is incurred by these subsidiaries overseas and Indian subsidiaries, you are not getting any set off. So the total tax incurred by the taxpaying entities in India when it is consolidated, it looks at a gross -- I mean, at a net level, it looks relatively higher as a percentage. Otherwise, at the individual entity level, when you look at it, the tax percentage is normal at the rate of 25.17%.

Okay. Just another question. See, you mentioned the volume for the stand-alone -- Gokaldas stand-alone that is 10.19 million for Q4, right?

1 million is for the India operation you want for the quarter for, it is INR 8.6 million at INR 73.

Okay. And what is the volumes for Matrix and Atraco? Atraco is 5.63 million for quarter 4 at INR 405. And similarly for the full year, it is INR 16.27 million for INR 420. Matrix, you can derive it. I've given the Indian operations number, so you can derive that.

The next question is from the line of Shah from RPL Investment.

Congratulations on very good numbers. So I have two questions. Number one on Africa. When you say Africa, you will go to $10 million to $115 million to $120 million, should we see that coming from Q1 itself or that is also going to be back ended and...

Sorry. So I think from a Q1, Q2 standpoint, we should be at a revenue run rate of about $24 million, $25 million. And part of the year it will catch up to go to that $115 million to $120 million.

So I mean the remaining next 2 quarters should be like $35 million kind of a number. So it will ramp up significantly.

So it will be about $33 million to 3 million.

Okay. Sir, secondly, can you give us what is the interest and depreciation at BTPL? And I'm talking about interest excluding what they are paying on the investments which you have made.

The depreciation is around INR 54 crores annualized basis. And INR 50 crores, INR 50 crores to INR 44 crores. And interest on the debt component is around INR 25 crores.

That is excluding what you have invested, right?

Yes.

The next question is from the line of Ravi Dara from the Indian Express. As there is no response, we will move on to the next question from Avinash Nahata from [ Parami ] Financial Services.

My question pertains to the FDA U.K. and EU. So what is the legislative or executive action which is pending from both the sites? If you can just explain.

So to start with FDA Europe, there has been an announcement that an FTA will be entered into between India. This is between the European administration and Government of India. They're working on it. And what they said was that they will work out on all the legal and the documentation by middle of calendar 2026. So June, July '26, they should come to some sort of an agreement on all the nitty-gritty issues of the FDA. And then it will require ratification by the individual 27 countries in Europe, which itself can be a long-winded process, and it will require ratification from all the countries. So European administration in Brussels will have to get that done with individual countries. So it's a long-winded process. We anticipate it to happen in 2027. whole process has been gone through by Indonesia as well, which is way ahead in this, and they have, I think, gotten an FDA with Europe. So India should also provided we have a meeting of the minds on all the various points that may arise from FDA. As far as U.K. is concerned, all of that is done, and it requires ratification by U.K. Parliament. In India, there is no parliament ratification required. It's an executive order. And the U.K. parliament ratification has not yet happened. I think it is probably due to political events happening in U.K., which is probably delaying it. There are a few other issues which has since then cropped up on steel, et cetera, which is going back and forth between India. Directionally, while there is an understanding that an FDA should commence soon. I think we are seeing some delays on account of political issues as far as U.K. FDA is concerned. Most of the documentation or rather all of the documentation for U.K. has been done. Does that clarify?

Yes. Just a follow-up on this is as far as 27 countries of EU is concerned, for them also, is it they have to go through the parliamentary process or it's an executive decision for them?

I think it's a parliamentary process in those countries.

Okay. And just if you can briefly talk about the labor availability and labor inflation in our country. That's all from my side.

Labor availability is different in different parts of India. So we have operations, for example, in Central India, Madhya Pradesh. We have operations in [ Ranchi ]. Labor availability is strong in these regions. In the South and in and around NCR, labor availability is a challenge. We also depend on migrant labors in these regions. And all the time, we tend to encourage migrant labors to come in and settle and work with us. So incremental expansion, we are going into rural areas, hinterland, et cetera, so that we can tap into labor availability. Even in the South, when we go into deep rural regions, we may -- we may be able to tap into certain labor there. As far as labor cost is concerned, this is a very important point. there is labor cost inflation happening. For example, recently in NCR, particularly in Haryana, the state government announced a 35% wage increase from April 1. So that was in response to labor unrest, high cost of fuels, et cetera, for migrant labor force in Gurgaon, Manesari, belt. UP responded with a 25% increase because what happened in Gurgaon, Faridabad spilled over to [ Noida ] and UP increased. So these kind of moves can happen in multiple parts of the country, and there could be some labor cost pressures. We will have to deal with these as they come by. An offsetting factor here could be India's rupee depreciation. We will have to continue to explore ways to improve our labor efficiencies or productivities, et cetera. Some amount of labor cost inflation does bring stability in labor force because we will see less amount of attrition in absent, which may also help drive productivity. But these are challenges that we will grapple with over the next 1 or 2 years in India. This is a challenge which will happen across the world as well, even if it is in Bangladesh, we've seen labor cost pressures continue to mount. If I look at Vietnam, China, et cetera, their labor costs are of the order of $300-plus. India is still at about $210. So there is still some headroom for us as far as labor cost is concerned. It has to be upset with labor productivity, which is always a challenge, but that's what we like to ensure that we get.

And across the three states, you mentioned Central India, MP, [ Bihar ] and Karnataka. Is there any possibility of operating a second shift?

So in some regions, in Ranchi, we are operating two shifts. In Madhya Pradesh, there is a possibility of operating two shifts, but it's not the entire factory. We are operating two shifts in part of the factory. So we're experimenting with it. Indian labor force, particularly women labor, do not -- very family oriented, et cetera, are not very supportive of working in the second shift. We have been far more successful in Ranchi because the labor force there are far more amenable to work in the second shift. They're far more open. That we are not finding that level of flexibility in rest of India, but definitely not possible in the South. we do have some success in Central India.

The next question is from the line of [ Bhavik Singhi ] from [indiscernible]

So basically, I want to understand from the Vietnam point of view, like as we see the region is doing good in the textile segment and the imports in U.S. have increased from Vietnam. So can you make us understand what's the reason behind it, how Vietnam is gaining share from other nations?

Okay. What China is moving, Vietnam is gaining. It's clearly a shift from China to Vietnam. Many Vietnam Vietnamese players are basically China-based who are moving their factories or setting up incremental factories in Vietnam, leveraging Chinese supply chain. So the way the world works is that it's a competitive supply chains, not just between apparel companies. So China has very large-scale fiber and yarn and fabric ecosystems, which gives a very competitively priced raw materials to their apparel manufacturing units. That's why despite their labor costs being high, and apparel is labor cost, labor intensive, they are offset with a lower cost of raw materials, fabric, even lower utility cost, et cetera, et cetera. Now what happens is when the units are set up in Vietnam due to proximity, the raw materials flow easily between China and Vietnam and then get shipped out of Vietnam. So that partly explains why Vietnam is growing. Having said all of this, Vietnam is also growing in electronics exports, automobile exports and so on and so forth. So they are a country with limited population and the labor costs are increasing in the Ho Chi Minh region or Hanoi region, and that will continue to inert pressure on apparel industry. Apparel industry has not been really able to leverage Cambodia, Laos, et cetera, because of political challenges in those regions. Unlike Vietnam, those countries are not that productive from a China standpoint. So there is a limit or a ceiling after which Vietnam can grow. But until then Vietnam will continue to be cost effective, thanks to the value chain that Vietnam has. The labor cost in Vietnam in and around large cities are growing or galloping. Around the big cities, it's moving closer to $400, but lower -- the hinterland has lower cost of about $250 to $300 plus. That's more expensive than India, but the value chain benefit continues to provide them that benefit. And lastly, you have to keep in mind that when you look at global trade in apparel, almost 2/3 are synthetic based, which is polyester and nylon. And in polyester and nylon, China has global quality and global capacities, which India doesn't have. So for synthetic garments, which are usually preferred in the fall/winter times, these countries do tend to dominate because of their quality of fabric that they have access to.

And sir, like maybe the synthetic demand is going to Vietnam, but what about cotton? Like is it maybe coming to India, if you can say that?

Cotton, of course, India, Bangladesh, all these regions have cotton. It's not like Vietnam does not do cotton, but they will have to rely on imported cotton fabrics from China, of course. So yes, from a cotton standpoint, from a cotton perspective, India does have its strength. And fabric-based garments are often used in spring/summer. That's why in the second half of the year, we tend to have seasonality favoring Indian apparel manufacturers.

As of now, just to summarize, we can say that the shift of the production that is decreasing in China is maybe shifting to Vietnam. But in the medium term, we can see that shift can happen to India from Vietnam as well if you summarize.

And if you look at [ Vardhman ], right, they have set up a synthetic fabric mill. If you look at India's synthetic garment production is also increasing. Gokaldas leads in synthetic manufacturing in India. And we are doing a lot of synthetic fabrics -- synthetic garment production, mainly in outerwear, et cetera, which is growing leaps and bounds for us. And the fabric for those are still dependent on China, Vietnam, Taiwan, Korea and all these places. So increasingly with domestic fabric coming in with the likes of setting up their units, we will see some additional traction coming for synthetic garments.

Tough for us to compete in terms of price for the synthetic more competitive in terms of price, right, in synthetic?

Because China is far more competitive in terms of innovation, price, quality, et cetera.

The next question is from the line of [ Sagar Makwana ] from MEG Securities.

[indiscernible] So my question is from current 50 lakh meters per month of capacity of TPL. So what's the capital consumption by a [indiscernible]

I think the capital fabric consumption will be to the extent of about 30%, 35% of it.

Okay, sir. And sir, my second question is, is there any difference in margins for European customer? Like as you mentioned in your last con alter largest customer in [indiscernible]

Is in Port segment in EU and margins are generally higher in [indiscernible] See, on an average, American customers give better margins than European simply because of volumes being larger, et cetera, and American retailers are larger. This particular European customer is a large European customer, so we do get our run sizes and volumes. But in general, American margins are better as long as there is a level playing of tariff. When India was on 50% tariff, we lost a lot of margins in America. But as long as the tariff is normalized, we find American customers better from a simple standpoint that the order sizes are bigger. American retailers are much larger. Europe has a more fragmented retail base. So to get the same revenue as an American customer, I may need two or three European customers. Europe is also more fashion-oriented, which really means that the run sizes are smaller. So there are those factors which impact cost margin equations.

Okay, sir. And sir, what's the difference between current war and the Russia-Ukraine war from [ Burgas ] export perspective?

I think the only current war has really resulted in oil prices going up, which means polyester, polybags, all of those things have gone up. LPG shortages meant that some of the ovens, which we use, which are done on LPG had utilization challenges. We had to switch to electric components, which took time to make it effective. So the disruptions on account of the Middle Eastern war has been much more than Russia-Ukraine war, which really impacted European demand, but did not impact supply chains. Here, some supply chain has been impacted. That's the difference.

Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the Gokaldas Exports Limited management for closing comments. Thank you, and over to you, sir.

Thank you so much. I think we continue to take every global shocks seriously. We continue to work diligently with our customers. We continue to work to strengthen our leadership team and strengthen our operational performance at every step in order to be resilient to external shocks. We believe that the worst is behind us, and that has tested us and proved to us that we are capable of handling anything that comes our way. Most of our operations were severely disrupted because we had bulk of our manufacturing in India or in Africa. And both regions got the worst end of tariffs, 50% of people tariff in India [indiscernible] abolishing or AGOA being taken out in Africa, which also changed the tariff by almost 20%, 25% or 30%. So some of these are behind us, and we feel that we are resilient. It proves that a strong team can handle any situation. We believe that the years ahead will benefit from the learnings that we have had and from the operational improvements that we affected in our business now, and we should reap that benefit in the years ahead. I see demand not to be a challenge, except for occasional blips here and there based on geopolitics. And if that is the case, then we should be able to capitalize on the productivity improvements and the automations that we have done for delivering continued growth in both revenue and margins. Thank you so much.

Thank you, members of the management. On behalf of Gokaldas Exports Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.