Mayur Uniquoters Limited ($522249)

Ladies and gentlemen, good day, and welcome to Mayur Uniquoters Limited Limited Q4 and FY '26 Earnings Call hosted by Monarch Networth Capital Limited. [Operator Instructions] 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 the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. On behalf of Monarch Networth Capital, it's our pleasure to host the Mayur Uniquoters' Q4 FY '26 Earnings Call. On the call today, we have Mr. Arun Bagaria, Executive Director; and Mr. Vinod Kumar Sharma, CFO of the company. We will start the call with opening remarks from the management and then move to Q&A. Thank you, and over to you, sir.

Thank you, Rahul. Good afternoon, dear investors and analysts. It's a great pleasure to address you as we reflect on the past years and look forward to the future of the company. Your support and trust in Mayur Uniquoters have been instrumental in our success, and we are honored to share with you the performance of Mayur. Thanks for giving your precious time to join Mayur Uniquoters Limited Q4 FY '26 Conference Call. Mayur Uniquoters Limited being a market leader in the synthetic leather industry and an organized player has been able to leverage emerging opportunities and delivered exemplary performance in past years, both in national and international business markets. Now I would like to start with financial highlights for Q4 FY '26 under review, and we will reply to your queries after our review of the financial results for the quarter. The company has achieved revenue from operations on a stand-alone basis is INR 260.55 crores, PBT INR 82.59 crores and PAT INR 60.71 crores. In the quarter, the stand-alone revenue increased by 22%, PBT and PAT both increased by 70% and 73% on Y-o-Y basis. The revenue from operations on consolidated basis is INR 273.35 crores. PBT is INR 81.23 crores and PAT INR 59.43 crores. And in this quarter, the revenue increased by 9% and PBT and PAT increased by 54% and 43% in consolidated basis. Further, our endeavor is to make the company a preferred supplier for the leading OEM and overseas markets, especially U.S. and European regions. And in addition to this, we have already received some good export orders from U.S. for OEM supplies, which are making a good contribution to our sales revenue and profitability. And this increased momentum is expected to continue in next 2, 3 years. While pursuing our business interest, Mayur Uniquoters has also been endeavoring to fulfill our responses to our society. Under the corporate social responsibility program, we have contributed towards the regular plantations. Approximate 45,000-plus plants we have already done, and have a plan to do it at large scale in coming years. The company has also adopted many happy schools for education of children. The company has worked on education for all and underprivileged children, various health care initiatives, especially child skill development, water for all, sanitation at school area, distribution of books, bags, cloths, et cetera, and most importantly, family planning and family welfare schemes in nearby villages. The state government has also recognized these initiatives on various platforms. I'm thankful to all the investors for their valuable time to those who became the part of this earning call. With this positive note, I would like to conclude and request you all to open the forum for questions and answers. Since we have limited time of 45 minutes for the call, therefore, request you to please avoid repeated questions. Over to you.

Thank you very much. [Operator Instructions] The first question is from the line of Anurag Patil from Quest Investment Managers.

Sir, my question is on the raw material side, particularly based PVC and an. How has been the current trend on the raw material prices? And also, are you facing any issue on the availability of base PVC. If you can throw some light on this.

So obviously, it's a petroleum byproduct. So the prices have gone up and the prices have gone up significantly. So like there was a challenge initially in the month of March, where people were expecting that there could be an issue regarding the availability of the raw material. But I think so those issues are resolved now and prices have also softened a little bit from the highs of March, has softened a little bit, but not an issue right now. .

Okay. And over the next 2, 3 months, are you expecting any further increase or it still remains uncertain?

So it's very difficult to predict the prices, definitely, because things have settled right now. So we don't see any increase in the near future as of today. It's very difficult to predict what turns out tomorrow. So like I cannot say that, those things. But things looking at more stable right now and availability definitely is not an issue right now.

Okay. And sir, for how it can impact us basically on the domestic business side? Do we have sufficient inventory?

So you have to see it in 2 ways, 1 is short term and second is long term. So long term, we don't see too much of impact. Short term, yes, maybe a month or so like because it takes some time to pass on the price increase to the customers. Definitely, it impacts a little bit in the short term, but we do carry some inventory also. So it gets average result in the long term. .

Next question is from the line of Pritesh Chira from Lucky Investment.

Sir, can you give some flavor on the domestic -- for the full year, the domestic growth and the export growth and some flavor on within that, the auto growth and the non-auto growth?

So we have said in the last con call also, our expectation from domestic growth is between 8% to 10%, and our expectation from export losses from 15% to 20%. Obviously, we are focusing more on the automotive sector. So we see more growth coming from the automotive side, whether it's in the domestic market or in the international market.

Okay. And this number now we are saying for the future, this is the volume growth, right? .

So when we are saying volume, we are seeing value growth also. So obviously, the value growth will be much more than the volume growth because our export prices are much more higher in the domestic industry also, what type of business that we are targeting, we are not targeting a very low price items we are targeting a much more higher value addition items. So we see more value growth than we see in volume growth.

Is 8% to 10% and 15% to 20%, which you mentioned for your usual...

We were seeing based on values.

For FY '26, can you give us some color on the domestic growth and the export growth, what it panned out to?

[Foreign Language].

[Foreign Language]

[Foreign Language] can you just give -- so FY '26

Actually we registered a total growth of 15% in value. And out of that, around 35.5%, we achieved the growth in export and 4% plus we achieved in domestic. So average is 15%.

Got sir. 35% growth in export, 4% to 5% growth in domestic, this was the value growth, right?

Yes, value.

Can you just give the total volume number what you sold?

31 million meters.

And what was the volume growth here? .

Volume growth is total 4.5%. Nearly 5%.

Okay. So 5% volume growth and 15% value growth.

Yes, if we see export growth, then it is 15%. And domestic is 2% plus. The average is 5% really.

[Foreign Language] Okay. Now in the last quarter, specifically, you have a very high margin as well. Obviously, there is currency depreciation also -- so how should we look at the -- how should we analyze this margin number? And how should we look at year forward considering that my guess is export business for you is now 60%, 70% of the business, right? .

Export is around total 42.5% now. And since we are focusing on export business more and especially automotive and export, therefore, it is expected to increase further.

Okay. And how should we analyze the exit quarter margin? Because it's a number which is like a 13% margin number, right? .

Yes. Yes. trying to maintain it, but it depends on the situation. And we have to consider the situation also. But if everything goes well and our just growth momentum has also continued with the exports business, then definitely, we are expecting that should be maintained.

The exact margin of 30%, right? .

I'm not telling you exact margin.

But in this exit margin, is there any one-off, any any inventory gain or it is just that you are selling more of into export, export growth rate is there, the currecny is depreciating, so as and when the mix keeps changing in favor of export, the margin keeps rising, that's how I should put it?

Yes, because export is increasing and our export prices are also very good prices and margins are also good. And secondly, this foreign exchange gain is also giving impact because of increase in dollar prices. So export is giving much contribution to our margins.

Okay. My last question is, you gave out your growth for FY '27 8 to 10 domestic usually export...

I think we already replied this question.

No, no, my question is, this export to domestic 45, 55, which was this year, what should this mix look like next year? .

Value-wise, if you see, then it should be 45% to 55% or yes, 45% to 50%. It should be nearly that. Nearly 40% to 45% will be our export. We are expecting yes. This will be the range. And remaining balance is domestic revenue.

Next question is from the line of Awanish Chandra from Smith Limited. .

Congratulations, full management team over a spectacular performance. Sir, have you added any new clients on the export side because we continue to do well on the export, our margin number and everything is showing that.

We have said in the past also, like our business is going with existing customers also and our volume with Ford was very low. So we have added more platforms on Ford business. The business has started increasing, but it will increase more in the coming months.

Okay. And sir, the exit rate of our quarter performance on the top line, at least that will be continued at least that much assumption we can make for the next year?

So in the long end, yes, Malay, if you look at the entire year as a whole year, we should be able to do that. I cannot comment on quarter-to-quarter right now?

Okay. Okay, sir. And sir, could you throw some light on your EU business. Overall performance is good, but have you done anything on the PU side?

So PU [Foreign Language] the business is muted right now. We have not been able to succeed too much in terms of the volume in PU and increasing in sales. But definitely, as we have highlighted in the previous con calls also, we are definitely talking to a lot of brands but business has not matured till now. In fact, there was an audit from a very big customer. They have passed us approved as a vendor, but no price commission settlement has happened until now.

Okay, sir. And sir, book keeping question, the overall PU business in last year, if end.

Okay. Vinod, you can give you the answer. .

For the complete year?

Yes sir.

It was around INR 27 crores -- INR 27.08.

Okay, sir. And sir, last question, the other participant was asking for margin. We have been used to seeing margin 24%, 25%. All of a sudden, we are seeing 33% plus margin. So we are really battle that what margin we should expect the next year or so I understand sir was saying 30% can be achievable. But if you can just throw some like that, these are the reasons, and we can expect 26% becoming 30%. Apart from export mix, any other reason which can lead to this kind of margin expansion from 26% to 30% next year?

It's very difficult to analyze because there is a lot of uncertainty in the market. So we have given a very clear guidance of 25% to 26% in the past, we should be able to maintain that for sure. [Foreign Language] because obviously, we have said our export margins are better than a domestic margin. And there has been some improvement because of the currency depreciation also. So we should look at somewhere around 25% to 30% margin. Exact [Foreign Language]

We'll take our next question from the line of Nishant Sharma from Mama Wealth PCG Research .

Congratulations on great set of numbers. Sir, 1 question on around if you can share the segmental breakup of each of the segments for full year and third quarter. And secondly, again, on margins, how much of this margin -- incremental margin is due to currency benefit that we have reached. .

Yes. Please not down the segment results. Export general INR 21 crores for the quarter and export OEM INR 88 crores. Auto domestic INR 55 crores, replacement, INR 41 crores, [indiscernible] INR 48 crores, furnishing [indiscernible] and others are balancing figures. Total INR 261 crores. And our other income includes this foreign exchange gain of around INR 30 crores.

Next question is from the line of Viraj from Syntel. .

Just you said the ForEx exchange income was INR 30 crores, that is for the year or over the quarter?

For the year.

For the quarter, what would be the FX gain, we would have realized?

FX gain for the quarter is around 75%, of which we have reported in the quarter, other income.

But other income is only INR 3 crores. So [indiscernible] so where is the reporting?

Sorry?

Where is this reported? This ForEx gain because other income is only INR 3 crores. So if I take 75% of INR 30 crores...

Because the market was down during the quarter. So fair valuation of the investment was also getting reduced, but that was compensated with the total income of -- including foreign exchange. So balance net -- this is quarter 4 other income is balancing figure for the total year. And what we have booked in up to December, this was the balancing figure.

No, I got that. What I'm trying to understand is, see, the ForEx income -- whatever ForEx gain we accrued, we reported that in other income, right? .

Yes.

So when I look at our operating gross margin and operating EBITDA margin, they're still around 15% and 31%. This is excluding the [indiscernible] as based on your calculation. So I'm just trying to understand what exchange.

Still, I'm not able to understand your question increase.

Sorry? .

For the quarter, we have shown INR 3.31 crores other income. And for the year, we have shown INR 35 crores other income. And this foreign exchange gain, we report in other income. And the total other income include foreign exchange gain.

Yes, that's what I'm saying, sir. So when I look at my gross margin for the quarter, which is quarter 4, you have reported close to 50% gross margin. and we have reported 31% EBITDA margin. Now this is excluding the other income which we report, right? So I'm just trying to understand what explains the higher gross margin and the EBITDA margin for the quarter.

Q1 for FY '27 or last quarter?

No, no. So Mr. Bagaria, what I'm trying to ask is, if I look at our contribution margin, for the quarter, which is Q4 '26, we reported 50% contribution margins. And we have reported 31% EBITDA margin. Now this is excluding the other income where we report the ForEx gain. So the reason for higher gross margin and EBITDA margin is what I'm trying to understand. What is driving that?

The reason for improvement in margin as a role is because of increase in the export business definitely Obviously, we had better get some stocks, so we could pass on some prices to the customers in the month of March. That also contributed to the margins. And it was a product mix, basically, we could sell some products with a higher better margins.

Okay. So going into 2027 and beyond, do you see the mix? And given that now you have a increased pressure on the raw material side with invasion. Do you see any pressure in terms of margins at the contribution level?

I told you, like if you look at the year as a whole, there should not be any pressure because obviously, the prices also changes to the customer. On a quarter basis, sometimes it can impact, but on the full year basis, it will give an out. .

Okay. Sir, second question was on the export business. Can you give some now color, how is the pipeline? I think you talked about using the platform from forward. But how is now the existing business and export into the distribution saying too customers or models? Is it more diversified now? And how is the pipeline now? So any color you can give?

So actually, we don't get fixed orders from customers all projections, okay? And -- they say this is a volume on each platform. And obviously, those projections get adjusted on a monthly basis based on the demand also. . So we have given a very clear indication based on what we have today, we should see somewhere around 20% -- 15% to 20%, 25% growth in the export business.

Because that will imply a...

Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the context kindly limit your questions to 2 per participant. [Operator Instructions] We will take a next question from the line of Badri Pena from Ronak Networth Capital. .

Sir, congratulations on this rumor set of numbers. Sir, I have 2 questions. Firstly, you can see that our other expenses have declined. So can you quantify the ForEx, any the freight cost involved during the quarter? .

Yes. Other expenses have decreased in this quarter because of 2 reasons only. Our freight costs have gone down in this quarter because of this war situation and all. And second one, our maintenance costs, repair and maintenance costs and consumables were also controlled. And because of these 2 reasons, our other income reduced.

Also like to add one more thing. So our productivity where we measure the OE has also improved in the last quarter compared to our previous year, and that has also contributed to the improvement in margins.

And sir, one more question on the low-cost inventory. So we can see that there is a huge jump in our gross margin -- so is there a possibility that because of we had some lower cost inventory with us since the previous quarters, and there was a significant rise in the RM cost, so did we take any price or can which we could make use of it, which will benefit us?

So [Foreign Language] started going up from the month of March, maybe after first week of March [Foreign Language] impact will not come in the month of March [Foreign Language] and we don't want to take undue price advantage from our customers also. So [Foreign Language] because we are not in a monopoly business, and in automotive, it takes some time for the price increase to happen. [Foreign Language].

So do Manav . Sir, I'm telling that in Q4 did we take any price hike because of the...

So I told you we have taken some price hike for -- I tell the domestic customers, [Foreign Language]

So sir you mean to say that there will be further price hike?

From [indiscernible] yes.

Yes. So sir, in Q1 FY '27 and Q2 FY '2, we should see...

[Foreign Language] so we generally raise supplementary invoices to them. .

In Q1, both impact will come, price increase in our invoices selfies and price increase in raw material impact.

Next question is from the line of Kiran De from Tablet.

Congratulations on a very good set of results. Two questions, sir. One more strategic . Sir, we keep paying 15% to 20% in export and 8% to 10% in domestic, that is well understood. So what should happen for year on for Mayor given that you now have scale, reputation, capacity and everything else, to push the export growth, especially the export OEM growth 20% to 25% from 15% to 20% to 20% to 25% [Foreign Language] is it approval for more models or more clients, so that's like a more of a strategic question. [Foreign Language] to put the growth for 20%, 25% from 15% to 20%?

See, obviously, we are targeting multiple customers and some customers, automotive customers, specifically takes time for the business to crack. So you decide fines -- but yes, we are talking with existing customers and new customers also are no platforms. This can happen. Once we have in our hand, we can comment on those things right now, what is in the pipeline, and we are not sure we don't want to comment on those things right now.

Got it. Got it. I mean because 1 year, 1.5 years back, sir, we are always seeing export growth, especially the OEM growth will be more than 20%, now we are scaling it back to 15% to 20%. So just wanted to understand if anything goes in plan...

[Foreign Language]. If you see on year-on-year basis, our export growth is 35% and automotive is 50%.

[Foreign Language] because FY '25, we ended exports with INR 343 crores. This year, we ended at INR 387 crores. So that's like a 13% growth. Have I got my numbers wrong?

You are considering the entire year's number?

Three years number, FY '25 to FY '26. FY '25 was INR 343 crores in my -- as per your previous con call that I compiled, and this year, it is INR 387 crores.

This year export is INR 386 crores and last year, it was INR 285 crores. And I'm telling you the numbers on standalone basis. I'm not including it the consolidated numbers. That will be added further to this number.

So we can look at stand-alone number.

Yes. Yes.Yes.

Got it. Sir, second question is employee expense suddenly from quarter-to-quarter, we've increased from INR 14 crores to INR 17 crores. Is it a hype or have we hired a bunch of people in the U.S.? What exactly is happening for a INR 3 crore jump? Should we consider this as a new normal going ahead for FY '27?

No. Actually, it has impact of new labor courts provisional impact. So that is the major impact in this employee benefit expenses. And the new hiring is also...

Are you talking about the Indian operation? Are you talking about the U.S. operation specifically? Sir, I'm just seeing the consol number and saying INR 17 crores.

Obviously, there is an impact, what Mr. Vinod has said, it's an impact of new lever code also, and we have hired a few new people also combined impact, but what impact is because of the new labor code.

Okay. So labor court, we have not taken in Q3, we have taken in Q4.

Obviously, because the impact it started from first 21 November 2025. Therefore, all future liability will come in March only. And now we will consider it on a quarterly basis

Next question is from the line of Fred from that BMS .

[Foreign Language]

ForEx and inventory gain?

[Foreign Language]

[Foreign Language] ForEx gain and other income treasury income and all other income -- other than business operations.

[Foreign Language]

[Foreign Language] the price increase impact on automotive will come in this quarter.

[Foreign Language] but I was wondering the inventory Jeanette year-end pay as on 31st March as per accounting policy. So [Foreign Language].

Cost or realizable value, inventory is always valued on cost or realizable value, whichever is less.

So adjusting for some of the other items, [Foreign Language]?

[Foreign Language] we don't produce against a stock at produce against orders only [Foreign Language].

[Foreign Language] like 25% of sales is our inventory, [Foreign Language].

[Foreign Language].

[Foreign Language]

[Foreign Language] because of the war situation. [Foreign Language] it is invoiced on the agreed price only.

[Foreign Language].

[Foreign Language] because of increase in exports, and especially export at higher value products. Secondly, it is impact of other income.

[Foreign Language]

[Foreign Language] gross total margin, then it will be included.

[Foreign Language] our order was good. So what happens if your orders are good, also your productivity also increases. And you can plan your orders in a much better way also. So our OE, I told in the previous question also, -- our operating efficiency also improved, that is one reason. Second reason our export mix also increased. Third is obviously some currency gains and both, but [Foreign Language] but very small volume, not a very big portion of is that.

And the other major impact is because of cost control, which you can see in other expenses.

[Foreign Language].

Yes, for the quarter, for the quarter.

[Foreign Language]

Actually, we have already informed you that our self growth momentum will be continued for next 2, 3 years. And export, we are also focusing on exports and automotive, which is in good margins. So definitely, we are trying to maintain it. And if we can say it should be 25% to 30% or if everything goes well, then definitely, we are expecting to be maintained this margin here.

And one small thing about the revenue [Foreign Language] .

Always, Q4 is the best. Generally, when if you see the trend [Foreign Language]. .

Next question is from the line of an SP1 From ICICI Securities.

Can help us guide what will keep this plan for next 2 years? I think TelePods of a new plant in South Asia and maybe a plant in Mexico, so if you have...

[Foreign Language] as I had Mexico last conformity you were not there. So we think we are looking at a global location -- but definitely, post Mexico the contributes a PA. [Foreign Language] whenever we are clear about that location, we will update you but the CapEx would be around INR 300 crores for a global location. [Foreign Language] but inside of particulate in South India, we have found space in our existing facility only [Foreign Language].

Sir, what should be a CapEx spend for the next 2 years or roughly...

[Foreign Language] depending on the land prices also. [Foreign Language]. And we have already ordered for the machine for the existing locations. So [Foreign Language].

So effectively cash outflow should be of INR 50 crores for this year, right? Because [Foreign Language].

[Foreign Language].

This will increase our capacity for how much -- what million millimeters?

So generally, it's a line of average [Foreign Language] then it depends on the product mix [Foreign Language] I'm just given approximite figures.

Second, we have always been guiding domestically, we should be growing 8% to 10% and exports to be 15% to 20%. So blended basis, your consol revenues have grown at 10% CAGR for the last 2 years. So is there anything that you are missing in this entire piece? Because then if you are again guiding to the same number, then we should be working with 10% top line growth on a consol basis for the next 2 years for you.

[Foreign Language] because of war situation our general export market was temporary impacted because there were some materials that were supposed to go to Middle East, but we could not dispatch those material [Foreign Language], our general export business did not go down. But because we had started our business in Europe also, so we had said our business has not gone down, but the increase that we were expecting in general export, that had to get malafied. So U.S. car duty can impact as an overall [Foreign Language].

So if things stand today, then 8%, 5% domestic growth and 15% to 20% is doable for us. [Foreign Language]

Obviously external factors are not in our hand, but what we see right now [Foreign Language] please don't hold us over quarter-to-quarter gains. When I'm saying it on a yearly basis.

Sir, what was the whole year number for auto OEM exports for the FY '26 and FY '25, you can help me exact sir.

[Foreign Language]

For the whole year?

Yes, auto OEM exports for FY '26 and '25 Yes,

Please note down. Auto exposed for the current year INR 290 crores and last year, it was INR 194 crores.

I'm sorry to interrupt, you may please rejoin the queue.

It will increase by about 50%. [Foreign Language].

[Foreign Language]

[Foreign Language]

Next question is from the line of Ashit Tiwari from Ikura Securities..

Just one question. So on the export side, how would the pricing work, let's say, is currency a pass-through or the bill in dollar terms and currency written by us?

[Foreign Language] anyways, what I would like to say, like our prices are fixed on a dollar basis, okay? So automotive [Foreign Language] like we have to take the impact. [Foreign Language] but it is case to case basis. So Mr. Badar said in the past also, that our overall business product manures in comparison to the entire PVC business in the world is maybe 0.005% or something like that, a 0.05% -- and they had a hope for growth, definitely. We are trying to enter into new segments also -- so when we say export to definitely, automotive is a very big chunk of our growth, but we are expecting growth in our general export market also [Foreign Language] and there are other markets also in Europe and in the U.S.A., where we see more potential to grow. So we are working on all angles. Definitely, [Foreign Language] price are fixed on a dollar basis. So we do get an advantage. General exports [Foreign Language] case-to-case.

And in general export, because now that the currency depreciated, do you get some cost advantage versus other countries or the are competing or local players.

But see, obviously, when you are selling to -- in general export, now you are dealing with 2 kind of customers. One is traders. Second is end users. [Foreign Language]. And where you're dealing with customers where [Foreign Language].

[Foreign Language] if you look at because now Obviously, the currency depreciated, so you have lower cost compared to, say, a supply for Yes, definitely, definitely...

Definitely that is an advantage situation for us [Foreign Language]. Yes. Anyone who is product in India.

Thank you. Ladies and gentlemen, we will take that as a last question for today. I would now like to hand the conference back to the management for closing comments.

So thank you, everyone, for joining for the conference call. So as we had said that we are funding a capacity in South India, so we have been able to identify some space in our existing locations. We have ordered one line, which will increase the capacity. And we are entering what we had said in the past until there is a very big challenge from an external factor, we see a growth trajectory in the level as given in the past. Thank you very much for joining.

Thank you.

Thank you. On behalf of Mayur Uniquoters Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.