Mayur Uniquoters Limited (MAYURUNIQ.BO) Q1 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Mayur Uniquoters Q1 FY '26 Earnings Conference Call hosted by Monarch Networth Capital. [Operator Instructions] Please note that this call is being recorded. With this, I now hand the conference over to Mr. Rahul Dani for opening comments. Thank you, and over to you, sir.

Yes. Thank you so much. Good afternoon, everyone. On behalf of Monarch Networth Capital, it's our pleasure to host the senior management of Mayur Uniquoters. We have with us Mr. Suresh Kumar Poddar, Chairman and Managing Director of the company; and we have Mr. Vinod Kumar Sharma, CFO. We will start the call with the opening remarks from the management and then move to Q&A. Thank you, and over to you, sir.

Thank you, Rahul. Yes, thank you. Good afternoon, dear investors and analysts. It is a great pleasure to address you as we reflect on the past year 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 Q1 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 the 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 Q1 FY '26 and review. And we will also reply to your queries and after our review of the financial results for the quarter. The company has achieved the revenue from operations on consolidated basis is INR 215.88 crores, PBT INR 54.97 crores and PAT INR 40.73 crores. In the quarter, the consolidated revenue increased by 1%. PBT and PAT increased by 7% and 2%, respectively, on quarter-on-quarter basis. The revenue from operations on a standalone basis is INR 206.41 crores, PBT INR 55.32 crores, and PAT INR 41.23 crores. In the quarter, the standalone revenue, PBT and PAT increased by 6%, 21% and 19%, respectively. Further our endeavor is to make the company a preferred supplier for the leading OEM, especially in U.S. and European regions. And in continuation to this, we have received some good export orders from U.S. and OEM supply which is resulting into a good contribution in our top line and bottom line. And this increased momentum is expected to continue in the next 2, 3 years. While pursuing our business interest, Mayur Uniquoters has also been endeavoring to fulfill our responsibilities to our society. Under the Corporate Social Responsibility programs, we have contributed towards the regular plantation and have a plan to do it at a larger 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 privileged children. Various healthcare initiatives, especially child skill development, water for all, sanitation at the school area, distribution of books, bags, clothes, 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 earnings 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, please avoid repeated questions. And for the sake of your information as required by all the investors, I'm giving you the numbers, please note down. Export general INR 24.95 crores, export OEM, INR 53.10 crores, total exports INR 80.05 crores, which is 40% of our total revenue. And Auto OEM INR 43.08 crores, replacement INR 31.32 crores, Footwear INR 44.42 crores, Furnishing INR 5.6 crores and Others INR 1.92 crores. And Domestic is on INR 126.36 crores, which is 60%. And grand total is INR 206.40 crores for the quarter. Now we are opening the forum for the question and answer.

[Operator Instructions] The first question comes from the line of Arnav from Ambit.

So my first question is just regarding what is the status of the CapEx that we were considering in Mexico?

Mexico status was clear. We decided we have find out the land and we made all the planning. And we were about to go about it. But suddenly, 1 month back, this kind of thing has happened. So we have postponed for the time being. Do you understand?

Right.

Yes. But it is intact. As soon as these confusions are completed, we will start it. Everything was done, it was just to push the button. But suddenly, these things have happened, which has created big confusion in the mind. But definitely, the way the requirement is increasing, we are about to.

So we'll definitely go ahead with the Mexico plant once the tariff situation settles down? Or is it possible that we'll consider some other locations for the plant instead?

No. Not at the moment. We have worked out. We have thought to move U.S.A. also, but the cost of production is very high. And we have to, at the moment, everywhere the situation is same. See this is only -- and I will tell you that we are not affected with this cost so far as automotive is concerned in U.S.A., because we are Tier 1 supplier. We are supplying to those who are making interior to their cars. So -- and then, they are taking it to U.S.A. and supplying to U.S.A., whatever burden will come, that will come to them. For automotive export, we have no problem.

Right. And so my next question is, are we sticking to the FY '26 guidance of 12% to 15% year-on-year revenue growth and 15% to 20% profit growth for the full year?

Yes. Yes, we are trying our all efforts to achieve the discussed results in terms of top line and bottom line.

The next question comes from the line of Viraj from SiMPL.

So two questions. One is, I think when we started this export journey, to U.S. many years back, we were among the very few -- correct me, we were among the two suppliers ex of China from Asia, where we were known for our quality and cost competitiveness. So given this positioning a few years back, now if I talk about 2025, how has this positioning changed? Are there still a few players, ex of China, from Asia competing in U.S. markets? Or do you think over a period of time, more players have emerged?

We are not very clear with your question. Can you repeat? I mean, we are not very clear what you want to ask.

So if you look at -- we are among the very few companies -- so if I look at ex of China from Asia, we were the very few companies who were competing global automotive space, given our credentials in terms of strong quality and cost competitiveness. How do you see the competitive landscape in terms of supply from Asia, ex of China? Over a period of time, you have seen more players emerging and competing for export, especially to U.S. and Europe? Or how is the competitive landscape, if you can give some color?

So there is no change of what it was in the past, like -- so specifically, if you're not talking about tariffs, so there is no change in terms of like our position where we were standing in the market in the past and where we stand right now. So like if you want to understand like if China or any other Asian country is more competitive in terms of production and R&D, I think so there is no change in stand what was in the past few years and what it is currently right now.

Okay. That is helpful. And similarly, in the domestic market, we have seen some competitors having -- making some good inroads in auto OEM. So there are players who have actually bagged orders on Hyundai-Kia as well. Now traditionally, our focus has always been on auto space, given that the focus on quality and good barriers in terms of approval and price is also better. So have you seen any loss of market share or any color you can give in terms of competitive landscape in domestic both OEM and [indiscernible].

If you're talking about specific automotive industry in the domestic market, again, we have not shared -- lost any market share, because of some other people getting Hyundai-Kia market, because obviously, most automotive companies will not work with a single supplier. They will have multiple suppliers. And we are supplying to Kia through a Korean partner, and we'll continue to supply to them and our business will also increase with Hyundai specifically, if that is what you want to ask.

Yes. And similarly, in replacement market, we have seen some stagnancy in the last few quarters. Can you give some color on how do you see things panning out for the year?

Replacement market specifically was with 3, 4 OEMs. Their sales have been down in the last quarter, specifically. And there has been some change in design also. So we will not see a massive increase in the sales in replacement market. But yes, the sales, which is a little down will improve definitely.

Okay. Just last question was on the tariff part.

Sorry to interrupt. May I request you to join the queue for a follow-up question, please. [Operator Instructions] The next question comes from the line of Awanish Chandra from SMIFS Limited.

Sir, first thing, how was the PU business during the quarter?

So if you talk about -- specifically talking about the first quarter, it was not -- there was not a very big improvement compared to last -- like to the last fourth quarter of the last financial year.

Okay. So the run rate of INR 6 crores, INR 7 crores is continuing?

Yes. Yes. Yes, for the time.

Okay. And sir, earlier, we had started our retail side of the business where we were adding distributors and we had a target of adding thousands of distributors. So what is the status of development on that front?

So that business is definitely improving. The sales, if you compare to the first quarter of FY '25 to the sale of first quarter of FY '26, the sale has gone up. The number of -- I don't have the exact number, but definitely, the number of dealers have gone up also maybe around 750 to 800. I don't have the exact number on my hand. And around -- okay, Mr. Poddar is saying, it's around 1,000 right now. The sale is also improving. We are adding more product lines also in the coming months.

Last thing, in South Africa, we are doing business with Mercedes-Benz, right? We have added more customers there.

BMW is also there.

Okay. So just a ballpark figure, how much will be BMW and how much will be Mercedes in a quarter or a year? Quantity.

So approximately 35,000 -- 30,000, 35,000 meters.

Put together?

No, no. For each OEM.

Okay. Each OEM 30,000, 35,000. Okay.

The next question comes from the line of Kautuk Yemdey from Axanoun Investments.

I just had a couple of questions. And can you please specify the impact of the tariffs on your products when it comes to the export side of the business, if there is any?

Okay, so like -- we -- like, obviously, the tariff is always -- only for the U.S. market right now. So as far as our OEM business is concerned, there is no impact as such. Because other materials we are exporting to Mexico. And so there is no direct impact on Mayur in terms of auto OEM business is there. We have a business directly for other market in the U.S. market. So we have built our stock for -- in the last 3 months over there till 25% tariff is there. So we see no major reason for us to worry, in terms of our sales to that market is concerned. In fact, no worry at all. Mr. Poddar is asking me to add, there is no worry that 25% tariff is there. Like we will be competitive, because there will be tariffs from other country -- to other countries also 25% or 20% or 30%, whatever it is. 50% was announced yesterday only, and it's applicable only for shipments -- shipments from 27th August. So that we will understand, analyze, and then we can give you a proper answer for 50% tariffs. But definitely 50% tariff is a worry, but [Foreign Language] we don't know whether it will stay or whether it's just a negotiation still, time will only tell. And these also on selected items. And we have increased our sales to other areas like in Europe also, in Middle East areas also. So [Foreign Language].

And just on the domestic front, what are the -- are there any constraints or demand side issues you're seeing right now?

Domestic market, first quarter [Foreign Language] but not very bad for Mayur. Obviously, growth was not there. See, obviously, July, August, September is always a good quarter for everyone because India is a very festive oriented market. So we are hoping that sales should improve in this quarter. And Mr. Poddar also wants to add something.

You see, leather, cloth manufacturers are increasing by 10 to 15 companies every year, and they go for competition. But is the competition, it is in the price. Now so far as local market is concerned, from the beginning, we are selling the high price and high-quality products. So therefore, there is a, say, a little bit down. But now we have find out the other way, on which we are working very fast like in Footwear. There are a lot of foreign companies are selling in their brand in India, whose prices are more than 3x than what is manufactured in India. Now we have started catching up with those companies. So already [Foreign Language]

We have Aditya Birla, and then Adidas.

Aditya Birla and Adidas. They have already working from last 6 months with these companies. Now they have a manufacturing in India in specific states. They manufacture in India and in there, from there they supply all over the world. Now the main thing is, we are working on these big brands, who can give us good price also. But it takes good time. Already, we are working on that. Now the system is that we have to give them the material. They will make the end product. And they will show to their customers. Out of that, whatever is decided, they will choose. That has also started coming. They have started giving us trial orders and we are working on that. Now the biggest advantage with this, it may take 1 year or 2 years time to fully come in this. But the advantage is once we are approved for those brands, we will be approved all over the world. And the margin is much better in, with these brands than Indian products. So I see -- you see, we always look for the bottom line. Top line is not everything. If your bottom line is not good, there is no use of working for top line. Now my thinking is totally different. I have to go to the places where I can get the value of the product. So that's why for footwear, leather goods, garment, we are moving all multinational brands, where they need a quality and they give you a better price. So far, footwear is concerned, I'm not worried in the next 1 to 1.5 years' time. It will definitely start increasing. Now listen, increasing is no issue. Tomorrow, I can increase 3x the sales of footwear industry. But if my profit remains same what I'm getting with today's sales, is it any sense in doing that? So we have to look for opportunity. Now my thinking is, whatever artificial leather is manufactured in the world, our contribution is 0.002%. So it tells me that we have plenty of scope. We have to move into it. Like today, in Saudi -- sorry, in Dubai, from India minimum 10 lakhs meter goes every month. I supply only 60,000. But my price is 3x or 2.5x than whatever supplied from India. So what I'm trying to say, it's a matter of finding the right customer. For that, you have to work hard. And I'm working on that. Once I understood that this type of business is not fruitful, I do not waste my time. Because ultimate aim is the bottom line. So the reason for footwear is now with these brands, we are now getting another benefit. Because they are making bags, and so many things other than footwear, as you know. And we have started entering in [Foreign Language] garment -- garment market, and that is also we are getting response. See, all these things take time. Like automotive when we started, it took us 2 to 3 years to... [Technical Difficulty]

Ladies and gentlemen, the line for the management has been disconnected. Please stay on hold while we reconnect the line. Ladies and gentlemen, thank you for your patience. The line for the management has been reconnected. Over to you, sir.

The question is new or we have to continue.

You can continue, sir, if you want.

As I have explained you what is the reason of Indian sale is going down in footwear, as we are working for that to please our sales, to please our profit. Now you see, advantage in our business is, there are so many areas like garments, footwear, leather goods, automotive, so many areas. They have fabric and genuine leather is used, artificial leather is replacement. Now artificial leather is replacing very seriously with this real leather. Because of the prices and this design problem. But I'm not worried at all, so far Mayur tariff is concerned, this happened. And now we are standing till now, because we have put our business in different segments. Generally, we have seen the people who are working for automotive, 90% is sell to automotive. Those footwear 80% to footwear. But I have distributed my areas. I'm not depending on one area only. I don't see any problem. And so far, this American problem is also going up. Up to 25%, we have no issue. 50% comes, I don't know. And so far as, even if 50% comes for my automotive sales in America, no problem. Is that correct? Because, we are supplying to Mexico. Right? If anybody has any confusion about this tariff, they can ask me open question.

I hope your question is answered.

The next question comes from the line of Siddharth from iThought.

I would like to ask you about -- you talked about professionalizing the company some time back. Like where are -- where is the company on that front?

So we are working seriously on that. Professionalizing is very easy. You can do professionalize today. What do you mean by professionalize? It is -- the company is not professionalized or this company is running?

Sorry to interrupt. The line for the participant has been disconnected. We'll move to the next participant.

Okay. You can take next question.

Yes, sir. The next question comes from the line of Sai Ganesh from Square 64 Capital Advisors LLP.

Can you share the volume details, sales volume for Q1 FY '26 and Q4 FY '25?

[Foreign Language]

I asked you this question, because you used to share the volumes.

No, we can give you the total volume numbers.

Yes, I want that. Total volume numbers.

You can note down. Total volume is 72.44 lakhs meters during the quarter.

And for Q4 FY '25?

It was 77 lakhs meters.

Okay, sir. And one more question from my side. Like we were expecting orders from BMW and Mercedes of 60,000 monthly run rate. We are at 35,000, you've answered this to the previous participant for this quarter. Like what can be the next level of growth or any business development that you can share like on that going forward?

Yes, currently, we are supplying to Mercedes-Benz and BMW, okay? And around 30,000, 35,000 meters we are supplying to each automotive customers. Now what do you want to know more on that?

Like any more business development, working with any different OEMs, which we can expect in this year or next year?

Definitely, we are working on it.

You see -- listen, this is a very great question. You see any industry, we always work for future. So this is understood that when we are working with some company, we are doing our best to improve the sales to that company. Further, like in South Africa, we are working with Mercedes and BMW. We are already in touch with other companies also in South Africa. So it is obvious any company cannot progress without his continuous effort to increase the sales and get the more and more customers. And you see my philosophy is, I never depend on one customer. Most of the people did that and they suddenly will crash. So I distribute my marketing everywhere as much as possible. So as I told you just now, that my sale is 0.002% of artificial leather, which is sold in whole world. The whole world is Mayur customer, that is I have to find out that. And what we are doing also, I'm not going just for sales. I'm going for sales as well as for the profit. So it is obvious that whenever you are selling to someone, we are always try to improve. Suppose we are giving three models, we always try to increase more models. And then we try to increase the customers like we are talking with Ford Motor in South Africa. The discussion has already started.

The next follow-up question comes from the line of Viraj from SiMPL.

No, my questions have been answered.

The next question comes from the line of Senthil from iThought PMS.

First on the export side, if you can share some thoughts, how much we export from Mexico to U.S. and in terms of sales and how much clarity from India, what would be our total share?

[Foreign Language]

We are just trading. Yes, please. What do you want to know? Can you repeat your question?

Sir, his line got disconnected. We'll move to the next participant. The next question comes from -- the next follow-up question comes from the line of Siddharth from iThought.

So you said that in this quarter, you sold 30,000 to 35,000 meters of leather to BMW and Mercedes. And the total sales volume for the entire company for this quarter was 77.4 lakh meters, right?

Yes.

So my question is, based on the current order book from Mercedes and BMW, how much of an increase can we expect from this 30,000 to 35,000 meters?

Listen to me. It is not easy to answer all these questions. Now I have to see as a company that how much I'm selling to automotive industry and how to increase. Now if I'm selling to South Africa, 35,000 meters, I have to see what is their requirement. So as I told previously that we always work to have more and more models -- is happening today, which I told you. And for a specific company, it is impossible to tell. My idea is, to increase the sales of automotive companies. How that will happen? Number one, by supplying to them more and more models. Number two, find out the new companies. So that's we are doing. So it is very difficult to answer these questions. We can simply say the NIM automotive OEMs all over the world, our sales are increasing drastically, and it will increase. Like recently, we got an order from Ford for their four models, we were hardly supplying 10,000 yards. Now in next 2 years, we are going to supply more than 100,000 yards. Everything takes time. It's not that I can reply you in one go. Very difficult. We are working and which you can see my result, that overall, what is the situation.

Understood. So one more question I have is, the previous participant asked about the percentage of revenue that -- I mean, sales that you actually make to U.S. via Mexico. Like from India, how much do you actually directly take it to U.S.? And how much do you route through Mexico, out of your total exports? I would like to get clarity on that.

Listen, Mexico is the hub of making interiors of automotive industries, and they use our material. They make interiors in Mexico. So that's why we are supplying U.S.A. auto companies materials in Mexico. It is going directly to Mexico, not to U.S.A. And then these guys make their interiors, put in their cars and then they export the car. So even if there is any problem of duties, that will be for their account, because they are selling the car. We are selling just component to them.

The next question comes from the line of Rahil from Sapphire Capital.

Sir just one question on -- any sort of guidance or outlook for FY '26? What sort of revenues do you see clocking in and margins also, EBITDA or maybe bottom line?

We have already discussed and told you in last our conference call that we will be expecting 10% to 15% increase in our top line and a 15% to 20% increase in bottom line.

The next question comes from the line of Praveen Sharma, an individual investor.

Actually, all my questions have been answered.

The next question comes from the line of Janish Shah, an Individual Investor.

Just dwelling a little bit on the export side. If you were to see the breakup, I mean, of the export, how is the export breakup look like with the U.S., Europe and rest of the world? You can give a little understanding with that. It'll be helpful in understanding what kind of an exposure we have in a different geography given the geopolitical situations changing around the world. That is one. And second is on the -- I mean, you already guided that the margin or the bottom line is likely to be better. Is this likely to be because of a change in the product mix, which is undergoing? That is one. Or it is likely to be because of the operating leverage, how does the profitability is likely to get benefit from? And how do we see -- like I'm saying as you mentioned, I mean, in the current situation, there are different countries are getting different kind of a tariff at least in U.S. and even people are looking at rejigging in their supply chains, probably they will be looking out for in the next 6 months as well. How do you read out that situation given this entire chaos, which is happening in the export market? That would be helpful. And how is Mayur is placed to get an opportunity in next 12 to 18 months for -- in this internal, I mean, the chaos which is happening around the world on the export side?

Yes. You have raised three questions. First question is regarding the breakup of region-wise export sales. So that data we will provide you separately. You send your mail so that we can provide you separately. Readily, we don't have that data. Okay -- the export data. And second question, the margin. Change in margin or increase in margin, we are expecting, and it is based on the mix of our sales mix and other impacts, say, our raw material and operating efficiency, productivity, efficiency, et cetera. So product mix also is getting changed. So that's why we are expecting increase in our bottom line, because of increase in exports and efficiency improvement.

Okay. And on the overall global front, how is Mayur is being positioned to benefit or how is it being positioned to read the situation entirely in a global market now?

Because of this tariff impact?

Yes. I'm saying, because it's not only India, it's also very -- other countries are also getting the impact. So there is going to be an imbalance in terms of -- imbalance in terms of the cost structure. And also it's -- a lot of automobile companies will be relooking at their supply chain, be it in Europe or be it in U.S. as well. So I'm just trying to understand what kind of feedbacks or what kind of pillars you are getting from the market with regard to the current situation or upcoming situation.

I have told you that our supply so far U.S.A. is concerned is to Mexico. We have got no effect on that, number one. Number two, other countries in Europe or other areas, we have no issue. And now -- you ask what happened this year, actually, if you ask me sincerely, can anybody can predict anything? It is next to impossible. The only thing I can say as a manufacturer, as a public limited company, that we are doing our best. Now can you tell me how many companies in manufacturing with that of 20%? Tell me. I want to know. Because, you people always ask, how you will improve, how you will do this, that. It is very impossible to predict. [Foreign Language]

[Foreign Language] And we have very high respect for that. The only thing is that [Foreign Language]

[Foreign Language] As a manufacturer, I know what is happening where [Foreign Language] We don't know when we get suddenly if we had a problem and we get a business. And that's what we are getting. So what I'm trying to say is simply, we are trying our best. And this situation -- tell me even Mr. Modi or Mr. Trump, can say anything what is going to happen tomorrow? So our job is do our best. And for that, we are well equipped. We have good professionals. We have a good team. And we are working on that. That reflects our results. You understand?

Yes.

Because it is very difficult to say all these things. Situation change every moment. Business is not like that, that what you are doing today, you will keep on doing same thing. You have to change every moment according to the situation. Then only you will get successful. For that, we are very particular. In business, there are two things, identify and satisfy. I have to identify my customers' requirement and then I have to satisfy that. That is the only two things which take you up or down. We are working very seriously on these two things. That's why we are getting progress. And in a nutshell, I can tell you, we are not leaving any stone unturned. But everything takes it's time. This is why our money was not made in 1 day. So only thing we have to see that we should keep going on. We should not jump.

Ladies and gentlemen, we'll take this as a last question for today. I would now like to hand the conference over to the management for closing comments.

Thank you very much for listening very patiently. I'm sorry if I said some hard words. I apologize for that. But what I can say, finally, that we are sincerely working for the improvement of our company, because it is public limited company. We have to work for our shareholders. That's all.

Thank you.

Thank you. On behalf of Monarch Networth Capital Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.